Quantitative easing boosts liquidity and eases budget constraints for banks.
Non-conventional monetary policies like quantitative easing (QE) are important when interest rates are already very low. In the UK, QE involves buying government bonds to boost the economy. By using different economic models, researchers found ways to counter the challenges of low interest rates, like adjusting bond prices or giving subsidies to banks. These strategies can help improve the economy, but the best approach is still uncertain.